tv [untitled] June 3, 2013 12:30pm-1:01pm PDT
commission of those that i have done and to the board of supervisors. we get into a bit of an arm wrestle and i can think of the last time, auto desk. the big question at the board of supervisors was why was this not competitively bid? and my response is that that i am not sure how you would do that, you have a tenant who wants space and they have a lot of money and want to give you and pay you a lot of rent and it just becomes impossible. one is to compromise one of the resolutions for example, a minimum parameter is the statement from the commission that we find a certain category of lease where house office, and practical for the port staff to bid. >> has it always been that way? >> it has been. >>vy been here 23, i am in my
24th year. it has been that way. >> this is a port policy or a city policy? >> it is a charter. >> we have never asked for a specific waiver or modification or clarification of how to do this? >> well, what you have to do is you have to apply for a sole source waiver and so when i go to the board of supervisors, it will start with the budget and finance committee, typically for what i do and what i am asking them for is a sole source waiver. >> right. >> which we have seen and i guess what the parameters for... >> right. >> sole source. >> and you know, amending the city charter, he also flagged the number of leases that we had and the agreement with the then board of supervisors and
the supervisors budget analyst was to bring forward the port's policy for when we bid or not bid. and while they did not take action on it, they did acknowledge that this is what we were doing. and then, council asked me to clarify that, the bidding requirements that the city imposes is for those leases that go to the board of supervisors. >> and to clarify, for the record, for the attorney's office, and so under on section 9118 of the charter, the leases that generate the revenue of 1 million dollars or more or have a term in excess of ten years or more and are not meri time leases go to the board of supervisors to approval and so it is those leases that are s*ug to board of approval that will require this competitive bidding so it is not every single lease so it was not the 3,000 square feet >> i am a little confused and i
heard the one million. >> if it is net that either dollar threshold or ten year. >> so it is not a square footage >> okay. >> i am just wondering in terms of the general leases is not to go through the competitive bidding but when we have space available is there some way that we do make the public aware and the public notice not to a formal rfp process that the people are aware when the space becomes available. it is a billion dollars over ten years. and how do feel know that they can approach the port for space. >> we are in the real estate business. we are on our website and we advertise, i am engaged in the broker community, you know, we have done 66 leases a year. that is a lot. >> but do people come to you and say i am interested in x,
amount of space. >> absolutely. >> is there a systematic policy that we make sure that we call everybody on the list? >> prospect lists get stale very quickly. it depends if someone tells me that they want three acres i am going to put a note on my phone, if someone wants 1,000 square feet, i will try to help them, but i know the prospect list gets stale and if someone is looking for space they have to come to conclusion in months. it is, yeah. but we do have lists if it is a parking lease and we are going to put that out for a competitive bid, we have those types of lists sure. >> did those include some of the commercial brokerage firms that often have clients looking for space? >> i am engaged in the community and we do not pay the fees and that is what they want if it is something like auto desk and they paid a fee to
ellis because their broker contacted me and so we did the deal and that is how it is done but i do the ability to pay over my tenure broker commissions the city attorney had determined that it is a sole source contract and so we can't play the broker fees. a sense of more not a very detailed, you know, process, but to because we make the port more open access to the people who are interested in the pace and having a fair and cool process of how they can get there and i understand that you cannot call every prospect all of the time and i guess that it seems like it is just a little bit of a black box for people. and that is what i would be concerned with because we have very desirable space. >> 1,000 square feet or 10,000. >> and i think that is why we
have done 66 lease and we have an 8 percent vacantcy rate and most of that is in the two buildings in the south. i get calls daily. on you know, generated from the website or signage or flowers and here is the public out there you know, they point their finger at the port and not the city when they say things like that. but the folks are very hard to deal with when it comes to leasing. >> and it is cumbersome and drags on forever. and so, you know, if there is any way that i can simplify it. but, the standard process. and well, yeah. >> we did... >> the standard lease forms and then you know the addendum that you attach to that, it was the restaurant or something. >> sure. >> and how do we get this... >> they are a typical process of the lease is about three weeks. if i get an application, we can have someone at an office or a shed in three weeks.
that is pretty quick. >> that is okay. >> that is acceptable. >> but i think that it is more how do people know what is available and where they are on the list if it is available. >> and again, we prospect lists are and then you are just keeping list ts. you know? >> that is what most people themselves do. >> i was just think thating given that we have technology today and you have somebody ha calls and i am interested in this and that and if they put themselves and the female and the regular and your available of office space and they give you their e-mail and you e-mail it and it is up to them to decide to call you, i understand that calling them is time and effort. but in terms of getting their address and saying, when i have space i will notify you, whoever calls me first >> that is how we operate. >> i was not hearing that you a of informing people of knowing
when the space becomes available. it is a little bit of you know that you are encumbered to call them and you don't have time to call everybody, but i understand that, if there is a way for them to be informed and you purge that list and every six months you say that you want to stay on the list or you can ub subdescribe any time that you want. >> i have no idea who asked for all of this paperwork, i was up to midnight last night. >> so what is the percentage of the port vacantcy now? >> the total is 105. >> and the office is 8 percent and that is primarily in the two buildings it is really the entity of the city it has always been.
>> you are not counting like pier 38 is off that? >> i am counting leasable space. >> right. >> you dont want to count anything that is... >> so like pier 28. you have the cruise terminals and you have the building north of there. >> what is that? 27. >> 27 and 29. >> it is the building that was occupied currently by the america's cup. >> okay. >> so that is one of our challenge and when the cup is done. and you know that that may be and it will be returned to us approximately, four or five different piers and there will be an intense period of trying to get them released to maintain the revenues and that is very much a big work planned for us for the next physical year and i am sure that we will be talking to all of you more about that. >> set up along the lines (inaudible) comments about using technology. it might behoof us to even put
the word out now so that people start thinking about it so that if they are interested in it, they will notify you and have them take affirmative steps and i think that it might be helpful to get the word out that we will be having significant space coming potentially coming on-line. >> what we have been doing so far as people call, telling them that the space or most of the space reverts back to march one and some of it a little earlier and as you may recall, the host and venue agreement grants them hold over rights in the event that they win. and so, you are trying to graple with that and the money suggestion and that has been the biggest hurtle for us trying to manage people's expectations and trying to get the word out. >> okay i am not hearing that we are going to make any changes in the process, i recommend that we come back and
what is the standard way of communicating the people without having to burden yourself to call everyone and to keep them notified and the periodic purge of asking to stay on the list or to unsubscribe themselves and use the technology to try to figure out how to manage that better so the people feel that they at least have the open access to knowing what is available on the port space. >> and you know, you can categorize. >> fire alarm. would you like to adjourn for a moment. >> commissioner? >> we adjourn temporarily. >> second. >> could i ask you to please live the building?
>> i move to recontain in open session? >> second. >> all in favor. >> so jeff, i think that i finished my comments and i don't know if anybody else had any other comments for this agenda item. >> this is a big subject and i don't think that i have explained it clear that is obvious, it is a big part of what we do and just to set and read it is really mot appropriate and so i think that coming back in august i will be better prepared to thoroughly cover the subject. >> yeah. you did a good presentation, i mean this is a huge amount of information here it is hard for us to, you know, to understand all of it and to make sure if a few hours. >> i think that susan is going to give me a tour and explain the process a little bit more.
delegated authority of the minimum rental rate schedule and demand along the water front has increased. and it just keeps getting better, and our current vacant rate, for all of the office is 8 percent, and the city wide average is 9.5. the combined office, or the office and warehouse rate was 1.5 >> real estate section made up of the property managers and myself have executed 66 leases and annual revenues of 4.5 million and which is an increase of year over year of 3.3 percent. and in addition we have negotiated 15 million dollars to the direct capitol investment by tenants. the port staff we have reviewed the commercially available data and we feel that we are generally are in line with the
market conditions and we have contacted with masrsten to review our rates and they typically, or they seem to agree with our suggestions for the rates. and however, there are some areas that we feel that we could increase and those are detailed in the staff report. and those office, land, and warehouse rates. san francisco our share of the off and the warehouse market represents 12 percent of the warehouse in the bay area. our industrial properties are not actually warehouses. they are sheds, they are cargo sheds. however, we have been able to negotiate competitive rates with that of the private sector. and even with these deficiencies in our property. and our average rates are between 85 cents or a dollar to
1.25. whereas it is less than that and that is for your traditional warehouse, and office. location does help. >> and and the over all, industrial warehouse, and the current vacantcy for warehouse is 2.3 percent. to all communication leases. and it is a big revenue stream for us and we have probably different cell sites and i love to do cell sites. and you know, it is leasing non-leasable space. and we get and we like to set a rate of $5,700 a month per cell site with the cows they are the temporary installations of $380 per day up to 60 days.
we can go, up to 9 years on those leases. >> who are we leasing from. >> i renewed four of them. sprint, next tell and t-mobile and at&t. >> verizon does the cow cell fights on wheels. but they do those for special events. >> yeah. >> like the giant's parade and then they lease the parking site from us you might have seen them in front of pier one for a couple of days to provide added service for that, fleet week and some of the places in town but we are involved when it comes to the port. the cup will have the temporary
sites and at&t is looking for fixed sites for us in different locations. the fixed sites are great and lock them in, and you know, it is a high monthly for really, it is a roof top. and the equipment, you know, we can negotiate that in the inside of the shed, i typically like to or acquire it on the roof. and it is a check and a nice increase and blocks it in. >> you said that you have gone 66 so far this year and when you break that down how much that have is pure renewal verses we opened up and started to lease the space? >> yeah. >> how much is coming on the screen to be renewed again? >> it is probably less than half of that and the new leasing is probably the majority of it. our vacantcy rate has really
dropped. you know, in what i do, i do the more difficult leases, and typically they are either difficult renewals, or i am out marketing and i do the vacantcies and so, i have done 35 new leases. that is from auto desk to ammunition, you know, the high revenue producing leases. am i answering your questions? >> and then i am wondering in this next year how much, you know, do we expect the turnover to be in terms of what you anticipate the number of new leases verses the renewals and i guess maybe the issue that you will explain to us understanding the terms of renewal and what we could do because we went through the situation of the pilots because we understand what the standard and what happens when a lease comes up and what we can do etc. etc.. and if i am answering your question, our retention rate is very high. you know, once you become a port tenant, you are going to be a port tenant for a while.
we do review our month to month leases to up them to market. and so that is one process, that is going on, and then, you know, hit different buildings for marketing. for example, 501. we are experiencing quite a bit of vacantcy there and so what will we do? we will put it on the website and do fliers and you know, talk to tenants. >> so do you happen to know what is on jerry's (inaudible) forward looking list of what number? >> that is? >> you know, we, you know, there is actively probably 20 leases that are being evaluated and some state of negotiation from some of the property managers. >> commissioners susan ren olds director of real estate. we are going through a process right now to update the renew al, list and we have a new
admin manager and she has stepped in and made a lease and there are 40 leases coming up that the property managers will need to renew or extend and that speaks to jeff's retention statement. that probably all of those tenants will renew. and because we had to relocate tenants from 1923, 29, 27, for the america's cup, we infilled a lot of the vacantcy that we had in the southern water front and we took those tenants from the southern water front i mean from the northern water front and put them in the northern and so they were 23 leases that actually stayed on port property. and so in the last two years, we have had kind of an unusual
activity in relocating tenants. but, once that dies down, then, we will go back to our regular marketing plan for new leases, and renewals and the property managers will be freed up, their time will be freed up to go back to the renewal process. so, we are hoping over the next year, things will settle down a little bit. >> so i hope that answers your question. >> okay. >> now, i also have a question on the restaurant and retail leases we have a few that do well and we have a few that don't do well and we keep them on a month to month and again, maybe in august you will explain. because some of them, i think, they want to have a longer term lease but they are not performing enough to go in one are the conditions to get off of a month to month to get to a permanent lease to explain all that have and so he understand how that retail policy works. >> absolutely. and how we are doing with the
list of hold over month to month leases. we are reviewing it and >> i don't think that we have had an update in a couple of years. where are we with the whole process. >> actually, thanks to the efforts of jerry and some of the implementation of leaves things on month to month because they were in an area that we were not sure what was going to happen like around crane cove park that we have a lot of tenants that we have left at month to month and tenants at pier 54 that are month to month because that is a compromised buildings and we are working with agreer engineer and only letting us go out a year at a time. so before the board of supervisors a couple of years ago is... it does not really exist in that format any more.
we either designated some of them to be permanent month to month or we brought them up, and some of them... >> do we have a policy for those permanent month to month? >> yes, we do. and it was a policy that was brought before the commission. >> now, what is the policy that i was referencing that also went for the board, or to the board for their, and they did not vote on it one way or the other but it was part of what went through the board process and so it came through here first. we can circulate it again, but, to a certain month to month, and the development project development they stay month to month, i believe that there are certain processing areas that are month to month and there was a list that we went through but you are right there is a long time that we should do that presentation again. so why don't we do it then >> i can do that and they will corporate it into our august presentation. because, some of the 40 that i just spoke about is remainder
of that list. the 550 are month to month and verses those that are coming up and how many are coming up for renewals and we have a whole port foilo of what the amount of activity that you have and be%backer obviously at the america's cup we will have space if they are not going to retain that space and we will know that there are more space coming up. >> sure. >> we just get a strategic view of what is happening in the leasing. >> yes, definitely we can do that. >> we control 374 parking spaces, almost exclusively leased to our tenants. and it is, you know, we have increased about 9 percent year over year and there are some areas a few areas that we think are not in line that we have proposed to increase.
and that is detailed in the staff report. and the final is, the final business line is special events and filming. you know, we have done a lot and we do a lot of events and a lot of public events and we do a lot of filming. and we propose minor changes to those areas. where we would ask for your fee favor to save administrative time for us coming back individually for each event, we will ask the fee waiver for the 4th of july celebration, fleet week city, new year's eve celebration and madona deluma and the ongoing, reductions for the small, fish gear storage and swap meet and delancy street christmas tree lot and i will return to you and ask for the approval of the rental rates for the next commission meeting. >> could you explain what
madonna da luma? >> it is the blessing of the fleet to commemorate the sea men that were lost. >> just following up, i think that i have spoke, commissioner, as part of the last package that we sent to you, we did send to you what i hope we can have as a reference guide which is those policis that relate to the leasing and we were not expecting to have you read them for today. but one of which is the month to month leasing policy that we did with the commission in the board in 2010. and this should be in your reference kit as well and we will try to draw a better picture of this in august but the things that effect what we do with are you newals are the retail leasing policy, which effects the ability to better the month it month policy that effects the long term or not and the tenant in good standing that effects any renewal in
regardless of the term and then we start getting into some of the other areas which pertain to either environmental or mari time and things like that. >> we did not lead all of it. >> they sent me 410 pages on friday. so just stunning. this came up and we with the pilots and i guess that the other thing is that it is part of the standard policy and maybe this is something that you can explain in august as well. to increase, 3 percent per year and what you know, i think that we would like to understand exactly how that gets applied. >> absolutely. >> and so, i think that the pricing of the lease is not just of the initial term but throughout the life of the lease and how that works. >> absolutely. >> that is something that we want to understand how that works. >> yes. >> okay. >> does anybody, any other questions?
>> okay. >> thank you. >> thank you. >> thank you for your time >> thank you. >> item 12, new business. >> okay. >> commissioners, and in addition to the i had ems that we will be bringing back in august, related to our leasing practices, i also have a request for an informational presentation by the water emergency transit authority weda on the current and future ferry service from san francisco, did i say that correctly? >> yes. since we are, i was very interested to hear your executive director's report that they are going to stand by three new terminal and included for the first time that i heard the city which is nice to see the north south verses the east west. and so i think that if we understand what their plan is, to increase water transport in the bay area so that we can understand what else has to be done to the infrastructure and the port to up port that. >> all right. >> okay. so i think that we can, you know, and obviously peter, needs to get into understand
that as well along with the city picture and i think that will be helpful. if we understand what they plan to do or hope to do, then we can encourage them to do more of this. >> great. >> and we are planning and you will see on the calendar for july, for peter albert to come back and make an updated presentation on the work that he has done doing and i believe that he has been in close contact with weta. and then, separately, we are looking at our water taxi landing as a separate project which we will bring to you at some point but we are just getting started on that. >> any other new business commissioners? >> have you guys thought about kind of the awareness program. from the port. >> market, like a marketing program. or the more involved. >> more towards san franciscans. they know absolutely nothing. >> i know, i speak to them all of the time. >> like to offer them some kind of incentives